This might be the most predictable plot twist in Hollywood history. After decades of begging for government subsidies for nine-figure movie productions, filmmakers are shocked that politicians are using taxpayer dollars as leverage to make demands of their own.
In Texas, director Milad Avaz shot a $2.2 million movie and applied for the state’s generous film incentive program, which can reimburse productions for as much as 31 percent of eligible in-state spending. His application was denied in June, reportedly because of the subject matter. The movie, “Elastic Hearts,” follows a Texas woman who travels across state lines for an abortion.
When Avaz called the Texas Film Commission for an explanation in August, he says, he received a blunt answer: “You made a film about abortions in Texas. What did you expect?” A spokesman for Gov. Greg Abbott (R), whom voters denied a fourth term last week, didn’t dispute Avaz’s account. “The State does not use taxpayer dollars to fund projects that portray Texas or Texans in a negative fashion,” he said.
State law explicitly permits officials to reject grants for “inappropriate content” or content portraying Texas or Texans negatively. But government shouldn’t be in the business of deciding which artistic viewpoints are sufficiently flattering. Once politicians start handing out cash, deciding which films deserve support inevitably becomes politicized. Now that Texas has turned Democratic-blue, maybe Avaz could try again.
The cleaner answer, for free markets and personal liberties, is to get rid of the subsidies. Texas previously denied incentives to Robert Rodriguez’s “Machete” movies. Chicago politicians threatened to withhold tax credits from Spike Lee’s 2015 movie “Chi-Raq” because they objected to its title. An alderman pointed to the roughly $3 million subsidy as leverage: Lee could call his movie whatever he wanted, he said, “if he’s not getting any public money.”
Whether in filmmaking or chipmaking, subsidies allow politicians to pick winners and losers. A neutral tax system lets investors decide which businesses deserve capital and consumers decide which products succeed. When film incentives make politicians arbiters of taste, economic favoritism becomes cultural favoritism.
Taxpayers lose in the deal. Georgia recoups only about 19 cents in state revenue for every dollar of film tax credits it awards. Studies in other states have found similarly abysmal returns. Film industry workers aren’t better off, either. Despite state legislatures throwing billions at production, more than 100,000 fewer people are working today in motion-picture production than in 2022. Ticket sales are down 30 percent from 2019.
Against this backdrop, Hollywood’s lobbyists seek special tax breaks. Unions, directors, actors, crews and studios are pushing Congress to create a federal incentive for productions that stay stateside rather than shoot overseas. A bipartisan proposal would create a 20 percent federal credit for qualified production labor costs, potentially rising to 30 percent. That could be stacked atop state incentives. President Donald Trump supports the federal credit.
This is how subsidy races grow. One government offers a handout, and others feel compelled to sweeten the deal. Hollywood just saw in Texas where that road can lead. Congress should leave movie financing to investors.
The post Lights, camera, government intrusion appeared first on Washington Post.
